Value of land, floorspace, amenities: hedonic price analysis of property sales in Auckland 2011-2014
Author:Peter Nunns, Hadyn Hitchins, Kyle Balderston, M R Cagney
Source:Auckland Council Research and Evaluation Unit, RIMU
What makes a house – or a city – an attractive place to live? Why do people pay higher prices to live in some places than in others?
These are not idle questions. Developers ask them when choosing where and how to construct new dwellings. Individuals and families ask them when choosing which city to live in, and where to live within cities. Urban planners ask them when attempting to establish rules that govern how and where new dwellings can be developed. And, of course, economists ask them when attempting to explain the decisions that people make about housing.
This report investigates the relationship between the observed characteristics of dwellings and neighbourhoods and residential property prices. It applies a spatial hedonic price model to a dataset of recent residential property sales in Auckland. In particular, our analysis considers the following issues:
- The relative value of land and floorspace to home-buyers
- The impact of location on property values – in particular, proximity to amenities such as the city centre and coastal areas
- The value that people place on other dwelling characteristics, such as pre-1940 (“heritage”) status, carparking, and views of land and water
- The value that people place upon neighbourhood characteristics such as the presence of pre-1940 buildings. ...
Auckland Council technical report, TR2015/012